Testing a start up company using statutory exclusions

[Guest kan]

I have a start up company where their first year of existance was 2001. During this year they also started a 401K plan for their employees. They have three "5%" owners who will be tested as HCEs on the ADP Test. Since no one had any salary for the prior year they are the only HCEs. The test fails miserably.

Is it okay to apply IRC Section 401(K)(3)(F) (the Statutory Exclusion rule) to eliminate all the NHCEs from being tested since no one worked a full year of service?

This would leave 3 HCEs and no NHCEs which, according to

Treas. Reg 1.410(B)-6, deems the plan to pass ADP Testing.

Am I interpreting the regs correctly here?